Driving to work this morning, I heard some radio talk show hosts talk about a new report that shows Millennials are earning about 20 percent less than their Baby Boomer parents. The median net worth of Millennials is 56 percent less than the Baby Boom generation. The hosts all sounded surprised, but being a Millennial with my share of financial difficulties, this seemed like old news.
I’m sure you’ve heard it before: the many trend stories about how Millennials live with their parents because they’re so broke; that Millennials are narcissistic, overly sensitive, and need to have trigger warnings on everything; that we’re addicted to technology, lazy, etc. etc. All of this is true, to some extent. Then again, we might be a terrible generation, but we’ve also had a tough hand dealt to us. Many public college tuition costs have skyrocketed, increasing 179 percent in just ten years between 1995 and 2015, and private college tuition rose 226 percent in that time frame. Most college students pay for tuition with loans, and those students graduate with an average of $30,000 in loans, not including interest.
To give you a personal example, I graduated college in 2015 and even with scholarships, help from my parents, working four to five jobs throughout college, and having summer internships or jobs, I still had about $40,000 in loans (not including interest). My monthly payments are the equivalent of rent payments on a pretty decent apartment.
Many Millennials graduated college right around the time of the recession and couldn’t get jobs to pay off their crippling student debt, so even with my $40,000 debt, I’m one of the lucky ones since I do have a job (although it did take tons of job applications before I finally landed an internship that later turned into a job). With so many people in debt or without jobs, it’s no wonder we’re living at home with our parents instead of buying homes for ourselves. CNBC compared a twenty-eight-year-old Millennial woman to her Baby Boomer mother and found that at twenty-eight years old, the mother was already a homeowner and raising kids with her husband while making today’s equivalent of $19,500 without a college degree. Today, her daughter has $33,000 in student debt and earns $18,000 making pizza and is nowhere near being financially stable enough to own a home and raise kids. You could say that Millennials should pursue higher paying jobs, like being a lawyer or a doctor, but those jobs also come with much more student debt, sometimes hundreds of thousands of dollars.
There are some silver linings to the cloud of financial instability, like learning to be creatively thrifty and minimalistic, but all these reports about Millennials not buying homes or investing could be bad news for the economy. Even if you’re not a Baby Boomer financially supporting your broke Millennial children, you could still be affected. Millennials are paying taxes to support programs like Social Security and Medicare, and the less money they make, the less they can support the programs that Baby Boomers and other generations are depending on for retirement. Baby Boomers looking to downsize their houses or move to retirement communities in the near future may have a harder time selling their homes since so many Millennials can’t afford to buy them. So don’t think you can just wash your hands of the situation and tell Millennials to deal with their problems—this is everyone’s problem. Stop blaming Millennials for not being financially stable. We’re not all lazy and entitled and narcissistic. We’ve been dealt a tough hand, and we’re doing the best we can to play it.